With their relentless profit-seeking, firms have not only exploited stakeholders but also abused our planet’s natural resources by leveraging advertising that spurs overconsumption. In the past century, the exploitation of raw materials has increased by 650 percent, and the extraction of natural resources has increased by more than 300 percent in four decades. The population of animals declined by almost 70 percent during that period, in which the land, air, sea, and rivers have been polluted, with global warming prompting natural disasters. And while a quarter of produced food is wasted, in deprived regions, many experience hunger. Consumers have also done little to change their habits and become more mindful about the unfortunate consequences of their lifestyles. At the current rate of consumption, by 2050, 2.5 planets will be needed to supply demand.
It is mostly the affluent nations and individuals that overconsume, restricting the availability of finite natural resources to others. Firms have trained us to consume to satisfy emotional desires rather than physical needs, but happiness is beyond reach for those falling into this trap. Many firms proudly exhibit their environmental peacock feathers, only to lure consumers with their greenwashing to make extra profit. Some firms have improved their production processes by incorporating alternative energy sources and recycling. But although such supply-side initiatives have been fostered by regulation, responsible consumption has not. Responsible consumption and voluntary simplicity remain slogans, and no consumption caps have been set by policymakers. Reducing consumption is likely to restrict consumers’ utility and firms’ profits while jeopardizing the economic growth of nations, so all stakeholders have a shared interest in enduring overconsumption. Thus, by 2030, with the exhaustion of natural resources, shortages and catastrophic weather conditions are likely to become more prevalent.
It is time to consider a new approach to cope with the overconsumption and abuse of natural resources. I discuss such an approach in my book The Cooperative Economy. For more information visit the book’s website.
Consumers pay the platform owners for their free services with personal data, which is analyzed, dissected, and reconstructed using advanced algorithms, machine learning, and artificial intelligence that is occasionally unintelligent and biased. The purpose is not only to predict consumer behavior, but to guide or misguide it as per the profit-making interest of the platform owner. In this process, algorithmic consumers economize on effort but lose their free choice.
This observation concerns not only the purchasing of products based on recommendations but also the shaping of political views and discourse. Private information is collected and integrated across numerous websites, content is analyzed, and soon emotions and facial gestures will be studied too, making us vulnerable to manipulation and psychological harm. Some claim that the Big Tech firms have established surveillance capitalism to sophisticatedly monetize our eyeball movements. In this process, algorithms set the tone and humans follow. The Cambridge Analytica scandal may be the most notorious case but is not an isolated event.
Recent legislation in Europe seeks to protect users’ data and ensure privacy, but it places a greater burden on small businesses, thus reinforcing the grip of platform owners. Enforcement has concentrated on the observable rather than important violations, with negligible penalties. In the United States, lobbyists have been successful in preventing or delaying protective regulation. In fact, platform owners have used recent data protection and privacy laws to augment their competitive advantage relative to their competitors and vendors. Automated algorithms have served not only to manipulate users but also to deceive antitrust enforcement, which cannot prove the malicious intent of software code. Hence, data privacy and free choice have been compromised.
It is time to consider a new approach to cope with the loss of privacy and free choice. I discuss such an approach in my book The Cooperative Economy (Routledge, 2023). For more information visit www.cooperativeeconomy.net.
The Big Tech firms with their platform ecosystems have become dominant by controlling the technological infrastructure on which we rely. The Internet was supposed to free us from intermediaries, but it gave birth to powerful digital gatekeepers that dominate markets at the expense of all stakeholders but their shareholders. The platform owners do not adhere to traditional rules of competition, and since they offer free services without restricting output, antitrust regulation is ill equipped to cope with them. They suppress competition with exclusionary practices such as self-preferencing their offerings, acquiring competitors, and penalizing vendors that work with competitors. The vendors offer value-adding complementary products and services, but do not receive their fair share. They pay high service fees to the platform owner that exploits its superior data access to compete with them. The Epic Games case revealed that even the most powerful vendors can be excluded from the platform.
For consumers, the free service comes at a high price. The dominant platform owners expand vertically and horizontally, restrict consumers’ choices while increasing switching costs, and eventually reduce quality and increase prices. As apparent with Meta, advertising revenue receives priority over consumer welfare, leaving users struggling with fake news and unsafe content. The owners of the Big Tech firms are among the richest individuals, and their software engineers are well compensated. However, the platform owners have exploited employees who are underpaid, overworked, and silenced. Platform owners such as Uber and Wolt made their contractors dependent and deprived them of employee rights before doubling the platform’s commissions. Employee welfare in traditional industries has worsened as well.
Policy making and regulation are in the works, but the slow wheels of justice cannot catch up with elusive platform owners that modify their business models at will. Lax measures such as trusting these firms to regulate themselves are naïve.
It is time to consider a new approach to cope with the grip of platform owners. My book, The Cooperative Economy, available from Routledge, proposes a solution.
